DO any of you sellers on ebay claim taxes against sales?

[brucebidder]

I spoke at length with a CPA about this and was told as long as I do it as a hobby and buy and sell and am not profiting by more than 5000.00 a year not to worry about it but I was just curious if anyone here is claiming any taxes on it or running it as a hobby for profit or a primary income source. I don't want anyone's financial info but am curious if I oversell one year if I should do anything about it?

 

-Bruce

[taxman]

Why burden yourself with all that extra crap to track?

[brucebidder]

THe reason I ask is that according to the CPA I spoke with she said that the IRS and ebay do work hand in hand to monitor top sellers, now obviously I don't qualify as a top seller, but am curious if anyone else deals with this stuff.

 

Bruce

[taxman]

Last I knew, the IRS tried to deem ebay a broker and that they should hand over the records of sales. Ebay refused on the grounds that they are not a broker.

[SRGilbert]

Along the same lines, some states "require" you to declare out of state purchases on your tax returns so you can pay your state the sales tax you would have paid at home. It's really more of an honor system kind of thing, hard to believe they would nail you on something like that.

[ninermaniac]

Along the same lines, some states "require" you to declare out of state purchases on your tax returns so you can pay your state the sales tax you would have paid at home. It's really more of an honor system kind of thing, hard to believe they would nail you on something like that.

 

 

You are absolutely correct sir!

[ianoid]

I claim ebay sales on my taxes. The net is low, and worse after taxes, but still there's some profit. Too much of a paper trail not to. I've been doing it for years, probably since I made more than $5k on eBay.

 

Note that you can subtract expenses against profits, if you have any. If you make a thrift trip to another town, you could potentially keep track of expenses, and make those non-taxable. This can be significant. My main expenses are product, paypal fees, and eBay fees. Too complicated for me to work anything else out of the equation.

[bojay1997]

Your CPA gave you some sketchy advice in my opinion. Selling on Ebay is no different than selling anywhere else. You have to declare net profits. With that in mind, remember you can subtract things like the original acquisition cost, storage costs, Ebay and Paypal fees, shipping, basically anything you had to do to get that item to the point where you sold it. Is your CPA right that chances are the IRS will never find out? Sure, but there's lots of things the IRS will never know, but that doesn't mean it's legal not to declare it.